Correlation Between Jeong Moon and Insung Information
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Insung Information at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jeong Moon and Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeong Moon Information and Insung Information Co, you can compare the effects of market volatilities on Jeong Moon and Insung Information and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jeong Moon with a short position of Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Insung Information.
Diversification Opportunities for Jeong Moon and Insung Information
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jeong and Insung is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information and Jeong Moon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jeong Moon Information are associated (or correlated) with Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Jeong Moon i.e., Jeong Moon and Insung Information go up and down completely randomly.
Pair Corralation between Jeong Moon and Insung Information
Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the Insung Information. But the stock apears to be less risky and, when comparing its historical volatility, Jeong Moon Information is 2.61 times less risky than Insung Information. The stock trades about -0.02 of its potential returns per unit of risk. The Insung Information Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 183,188 in Insung Information Co on August 28, 2024 and sell it today you would earn a total of 9,612 from holding Insung Information Co or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. Insung Information Co
Performance |
| Timeline |
| Jeong Moon Information |
| Insung Information |
Jeong Moon and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Insung Information
The main advantage of trading using opposite Jeong Moon and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Insung Information can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Insung Information will offset losses from the drop in Insung Information's long position.| Jeong Moon vs. Korea Real Estate | Jeong Moon vs. Korea Ratings Co | Jeong Moon vs. IQuest Co | Jeong Moon vs. Wonbang Tech Co |
| Insung Information vs. Korea Real Estate | Insung Information vs. Korea Ratings Co | Insung Information vs. IQuest Co | Insung Information vs. Wonbang Tech Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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